Right now, customers can only buy the Surface RT tablet at Microsoft Stores

Reports on Microsoft's Surface tablet have been a mixed bag lately, but All Things D is pretty clear about its position: the demand and sales just aren't there.

All Things D recently spoke with Boston-based brokerage firm Detwiler Fenton about Microsoft's Surface RT tablet. The verdict? Microsoft better get its tablet out in other stores or it's going to sink.

"Lack of distribution is killing the product," said Detwiler Fenton. "Mixed reviews and a [$499] starting price tag certainly don't help, but lack of retail exposure at Best Buy and others is severely depressing sales."

Right now, customers can only buy the Surface RT tablet at Microsoft Stores. The problem with this is that there's only 31 of them, with another 34 smaller Microsoft kiosks around the U.S.

Due to this lack of presence in major retailers, Detwiler Fenton estimates that Microsoft will only sell 500,000 to 600,000 Surface RTs in the December quarter. This is a strong hit to previous estimates of 1 million to 2 million.

Recently, a pair of reports from both CNET and The Seattle Times showed differing views on how Windows 8-based touchscreen tablets, convertibles and laptops are faring. CNET spoke with IDC and IHS iSuppli analysts, who said retailers were having trouble keeping them on shelves due to high demand. However, The Seattle Times begged to differ, echoing Detwiler Fenton's concerns: there just aren't very many Windows 8 tablets out yet, and those that are are impossible to find. However, other Windows 8 tablets are sold in major retailers like Best Buy; not just Microsoft Stores.

Microsoft's Surface Pro is expected to be released in January, which will feature the Windows 8 Pro operating system instead of Windows RT for ARM-based tablets.

I think they need to take the plunge and bump the RT and RT pro to before the holidays and offer the RT for $499 with the cover or $399 without. That is the sweetspot. As for the RT pro $899 is pretty aggressive based on the fact that it is much higher specs than even the macbook air and is $100 less. If they did some promo for the first 3 months to give the cover keyboards for free that would get people buying even more. I know it won't make as much money but you need to get followers of your ecosystem to join a market flooded with other devices that others have already spent so much to be integrated to. Once you have them you can start modifying prices and take the price apple point.

This is Microsoft you are talking about. They will not discount product until they realize that the only way to sell it is through a fire sale.Ballmer seriously believes that Surface is the 8th wonder of the world and that everyone, including their pets would want one.I have Windows 8 device (Lenovo Yoga) and though I like touch screen interface, the Windows 8 store is a disaster. No quality apps, no way to find an app by vendor (1000 variations of YouTube app is a classic example), inconsistent Charms interface between apps, plenty of bugs even in the Microsoft apps, over-simplistic functionality compared to full-featured applications, the list goes on.